In another decade when the youngest Baby Boomers are in their early 60s that entire generation will have reached retirement age. Most of them we presume will have retired by then, but as we know some of them have already delayed retirement. If the economy continues its tepid recovery and wages continue to decline relative to commodity prices, it can only become more difficult to plan a timely retirement. Several additional factors contribute to assessing whether this generation can comfortably retire and enjoy their later years.
By 2025 the entire Baby Boomer generation will be between the ages of 63 and 77. In general, this represents much of the age range where significant costly health problems arise. Some of these may be due to a lifetime of bad habits that include poor diet, continuing problems with alcohol, tabacco and drugs, lack of exercise and a sliding into obesity.
About 2.5 million Americans die each year. Half die from various forms of heart disease or cancer. About a third of the rest die from various chronic lung diseases, cerebrovascular accidents or Alzheimer’s disease. Overall, about 40 percent (1.1 million) of the 2.5 million yearly deaths are due to preventable causes. Most of those involve tobacco use or to being overweight or obese. Most of the remaining preventable deaths are alcohol, infectious disease, toxin or drug abuse related. The remaining 10 percent or so of preventable deaths are due to either motor vehicle accidents, firearms or sexually-transmitted infections.
If the current overall death rate were to continue at 2.5 million over the next 10 years, the population would decline by about 25 million if there were no mitigating factors. We must assume that we will be unable to chip away at the above-noted preventable causes of death even while doing so is and should be a long-term goal, one that is supported by the Affirdable Care Act.
Under ordinary conditions net immigration and an increasing birth rate have often more than compensated for the death rate, resulting in an increasing population. For several reasons we may see a net decrease in the U.S. population over the next ten years.
Of the first of two factors that tend to compensate for death rate, birth rates in the U.S. have been in decline since the start of the Great Recession and have recently dropped to near zero. In addition, net immigration rates have declined as deportation rates have measurably increased over the last several years, under pressure from the Republican Congress to deal with the “illegal immigrant” problem, and from suggested self-deportation pressed by the Republican nominee for president. Indeed, there has been a net decrease in illegal immigrants from about 12.5 million to 11 million (2011 data). With no legislative solution for the immigration problem on the horizon we have to assume the number of immigrants is likely to decline over the next 10 years or at best remain steady. If so, the U.S. population could have a net decline somewhere in the range of 20-30 million in the next 10 years.
Attempts at improving the healthcare picture through the Affordable Care Act (ACA) as noted above may help reduce the expected population decline if at least some of the expected improvements in disease prevention are made, and even more improvement may be possible if Americans begin to take more responsibility for their health with continued cessation of tobacco use, weight control efforts and improvement of exercise patterns envisioned by the ACA. Better nutrition would be a great help as well. Nevertheless, we may still see many of the elderly with with varied forms of chronic disease.
Finally, if jobs continue in net decline while more and more elderly continue to work at least part time to make it, then there will not be enough new funds coming into the the social security and Medicare-Medicade systems to pay for what is taken out. The economic structure of the society will likely change unpredictably as we go through this period. A net deflationary pressure is likely to develop with a new microeconomy or alternative economy for many who are at the fringe.